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CFAP 1 AAFR Winter 2020

The document provides examiners' comments on the Advanced Accounting and Financial Reporting exam from the Winter 2020 CFAP examination session. It summarizes the overall and question-wise passing percentages and common mistakes. The overall passing ratio was consistent with the previous session at 32%. For most questions, examinees displayed inadequate knowledge of relevant IFRS standards and failed to fully address the requirements. The highest individual score was 85 marks.

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110 views2 pages

CFAP 1 AAFR Winter 2020

The document provides examiners' comments on the Advanced Accounting and Financial Reporting exam from the Winter 2020 CFAP examination session. It summarizes the overall and question-wise passing percentages and common mistakes. The overall passing ratio was consistent with the previous session at 32%. For most questions, examinees displayed inadequate knowledge of relevant IFRS standards and failed to fully address the requirements. The highest individual score was 85 marks.

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Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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THE INSTITUTE OF CHARTERED ACCOUNTANTS OF PAKISTAN

CERTIFIED FINANCE AND ACCOUNTING PROFESSIONAL (CFAP) EXAMINATION

EXAMINERS’ COMMENTS

SUBJECT SESSION
Advanced Accounting and Financial Reporting Winter 2020

Passing %

Question-wise Overall
1 2 3 4 5
7% 51% 16% 41% 63% 32%

General comments

Overall passing ratio in this paper was consistent with last result of 31%. Majority of the examinees
displayed inadequate knowledge of IFRS 16 (Q3) which might be due to selective study. Further,
in Q1, many examinees directly jumped to the conclusion or just presented computations without
providing the reason.

There were many impressive individual performances as well. The highest score in the paper was
85 marks.

Question-wise common mistakes observed

Question 1(a)

 About half of the examinees were clueless about the area examined and scored maximum of 1
mark only.
 Most of the remaining examinees added penalty to the cost of completion instead of deducting
it from transaction price. Further, cumulative catch-up adjustment was made but the reasons for
making this adjustment were not discussed.

Question 1(b)

Answers were often correct but incomplete. Examinees did not discuss changes to be made in the
presentation of financial statements in respect of comparatives and classification. Further, very few
examinees discussed the possibility of subsequent sale at Rs. 145 million as an adjusting event.

Question 1(c)

Examinees remained restricted to computation of the gain.

Page 1 of 2
Examiners’ Comments on Advanced Accounting and Financial Reporting – CFAP Examination
Winter 2020
Question 1(d)

 Examinees concluded that the scheme should be accounted for under IFRS 2 instead of IAS 19.
 Where the examinees mentioned that the entity will be required to recognize expense in the
profit and loss statement, they did not give details of the items which should be included in the
total expense.

Question 2

 Gain on initial recognition of the debenture was taken to other comprehensive income instead
of profit or loss.
 Effect of impairment loss was not taken to other comprehensive income.
 Interest income for 2018 was not recognized.
 Cumulative loss previously recognized in other comprehensive income was not reclassified to
profit or loss as a classification adjustment upon de-recognition of the debenture.

Question 3

 In transaction (i), the initial right of use asset should have been computed using instalments
amount of Rs. 50 million but the examinees adjusted future instalments for CPI. Further, at year
end, lease liability was re-assessed using instalment amount of Rs 57 million which was not
required.
 Transaction (ii) was accounted for as a lease though the agreement did not contain lease due to
the absence of identified asset.
 In transaction (iii), the adjustment for Rs. 100 million (below fair value sale proceeds) was often
not accounted for.

Question 4

 The requirement to adjust an existing consolidated statement of financial position rather than to
prepare an original statement, seemed to throw a number of examinees clueless and highlighted
some fundamental misunderstandings.
 Unrealized gain on printers sold by LC was taken at Rs. 20 million instead of Rs. 18 million.
 Investment property rented to LB was not included in property, plant and equipment. Those
who included it in property, plant and equipment did not depreciate it.
 Contingent liability of LB was re-measured at reporting date to Rs. 60 million though it should
have been kept at its acquisition date’s fair value of Rs. 40 million.
 The entire effect of deferred consideration of LC was taken to goodwill instead of first reversing
the bargain purchase already computed and increasing the goodwill by the remaining amount.
 Intangible asset of FD was not adjusted for amortization.
 Intangible asset of FD was not included in computation of intangible assets of the group. Further
those who included intangible asset of FD, did not adjust it for amortization.

Question 5

 Though 30% examinees scored 10 or more marks in this question, many examinees had no idea
of format of the statement.
 Number of units issued and redeemed were not mentioned.
 Breakup of undistributed income into realized and unrealized income was not presented.

(THE END)

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